The UK's high net worth individuals are exploiting a loophole in pensions legislation enabling them to buy second homes abroad with their self-invested personal pensions. Wealthy investors are taking advantage of Gordon Brown's vacillation over the investment of SIPPS in holiday apartments in the French Alps and costal towns, according to reports in The Times. The UK Chancellor had initially promised to close this loophole back in December but lawyers have found a way around the rules using a French leaseback scheme which could also operate in Spain and other European countries. In the past few weeks many HNWIs have purchased French leaseback apartments, according to Sykes Anderson, a firm of solicitors. The UK government realised that £10 billion ($18.9 billion) had been earmarked by investors to purchase buy-to-lets and holiday homes from April 6, potentially costing £4 billion in tax relief on the contributions. Since then there has been a backtrack on the rules: Mr Brown has reneged on his promise to allow SIPPS to invest in residential property, including buy-to-let flats and overseas holiday homes. Sykes Anderson, said that while the possibility to invest in overseas leaseback remained, it did not anticipate this to be a mass market trend. The fees and complexity of investing SIPPS in a leaseback scheme is compensated by higher returns than one would get investing elsewhere. The French scheme allows the investor to buy a tourist property and then let it to holiday makers through a management company. Many such developments are available for mass affluent investors in French ski resorts and also in Nice and Cannes.